3 Key strengths of Indian Economy... Due to the recent Economic Slowdown most of the western countries were effected unlike India which was relatively less hurt as the whole dynamics of our economy is different from other countries i.e., Large domestic market Less dependency on exports Leveraging 3

4 Contribution of SME Sector in India Contributes 45% of the total industrial output. Contribution to national GDP is projected to go up by a minimum of 5 per cent and touch 22 per cent share of India's GDP by % of the total exports. Employs 42 Million people and creates 1 Million jobs every year. Produces more than 8000 products. 4

8 Factoring an alternative Factoring offers an alternative as it provides funds based on the transaction strength rather than merely collaterals and strong financials of the borrower. 8

9 Factoring A flexible alternative to traditional forms of funding. Client makes a sale, delivers the product or service and generates an invoice. The factor buys the right to collect onthat invoice and allow funding, usually 80%-90% of the invoice value. 9

10 Development of Factoring Services Started in USA in 1920s and introduced to other parts of world in 1960s. Presently, over 900 companies in more than 60 countries all over the world. Kalyanasundaram Committee In 1991, RBI permitted SBI and Canara Bank to start factoring services through their own subsidiaries. In 1993, RBI allowed all the scheduled commercial banks to introduce factoring services either departmentally or through a subsidiary set-up. 10

11 Advantages of Factoring Services. Factoring as a financial services product is superior to the conventional Bank finance in terms of its : An easy and fast method of turning accounts receivables into cash. Offer funding up to 90% of invoice value. No geographical limits. Collateral security usually not required. Value added services in the form of sales ledger administration, collection & credit protection Credit screening cum Credit monitoring and early detection and warning of customer service problems. 11

12 Opportunities for Factoring India and China are becoming manufacturing hub for the entire world. Financial Sector is becoming more strong and diversified. India s share in total factoring business of Asia is only 2.2%. Global Factoring business is growing at more than 15.00% CAGR. Alternative Product for SME & Emerging High Growth companies. 12

15 Credentials Pioneer of factoring business in India. Member of Factors Chain International. First Private company to initiate export factoring. IFCI as a group can provide term finance, venture capital funds, advisory services and working capital finance through Single Window Concept. 15

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